U.S. Federal Reserve may deliver one cut this year, former chair Yellen says:
Former U.S. Treasury Secretary and ex‑Fed Chair Janet Yellen said she thinks it is still possible that the Federal Reserve delivers one interest‑rate cut this year, despite the inflationary pressure due to the Iran war.
Speaking at the HSBC Global Investment Summit in Hong Kong, Yellen indicated that if she had to make a baseline call ahead of upcoming policy projections, “maybe there would be a cut later in the year.”
"Short-term inflation expectations are up slightly, but they're going to watch all of that very carefully, and I think they have an open mind."
She emphasized that the uncertainty driven by the Middle East conflict is a "broad supply shock" raising inflation but that long-run inflation expectations remain fairly anchored, leaving room for cautious easing.
The Federal Reserve has kept benchmark rates steady at 3.50%–3.75%, with policymakers earlier signaling that at least one cut could be appropriate in 2026, though markets have recently scaled back expectations for easing.
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